Employment Relations in Australia

Subject: Law
Pages: 8
Words: 2036
Reading time:
9 min
Study level: College

The decline of union density and membership in Australia indicates diminishing influence of trade unions. The decrease is one of the most remarkable industrial issues that the country is facing. According to Bailey, Price, Esders, and McDonald (2010), less than a half of Australian youth and adults have or are likely to join a trade union. Union decline in Australia is not a new scenario but rather a long predated decrease of the award system, whereby state and federal tribunals imposed industrial regulations. Similar to other public institutions, the instability of Australian trade union’s strength is a reflection of historical forces, which are beyond the control of the unions. This paper discusses the history of union membership and density in Australia, as well as the impact of their decline.


There has been a long-term affirmation that unionism started in Australia in 1850 as a result of the transformation of the country’s economy by the discovery of gold. At that time, only skilled craft workers, miners, as well as seafarers were allowed to join a trade union (Bongiorno, 2011). However, by 1880 other different occupational groups became unionists and this saw the number of employees belonging to trade union account for 20% of all workers.

The improvement did not last since union density reduced from 62% to 49% from 1954 to 1970 as a result of structural changes in the economy. Due to the job losses that were caused by a recession, which occurred in 1981, the Australian Council of Trade Unions (ACTU) signed a pact with the federal Labour Party in 1983, agreeing to go back to centralized wage fixation. In the agreement, the Labour Party on its part promised ‘an industry development policy’ to give a boost to manufacturing.

Following the selection of Hawke-Keating Labour government in 1983, a return to centralized wage fixation took place. Nevertheless, the new government floated the dollar, privatized government-owned enterprises and reduced tariffs, an agenda that seemed neo-liberal. Manufacturing industries continued to be crippled, and only 15.5% of the total Australian workforce was employed in factories by 1986. For instance, between 1981 and 1984, 14,000 workers at Port Kembla Steel Works were laid off. The low manufacturing employment level caused devastation to many long-established unionized communities (Barry, 2016).

Other than producing a temporary shock, these massive job losses severely weakened trade union organization and reduced the confidence of voters in the ability of the government to guard their jobs. These negative changes also caused more disintegration amongst working-class communities and between workers and their political representatives who had a significant influence on labourism (Peetz & Bailey, 2011). The majority of Australian trade unions were left “confused” after the Labour party to which they remained affiliated embraced free market principles with no clear guiding ideology.

Apart from erosion of its historical base by social and economic changes unionism in Australia was also negatively affected by the formation of New Right employer associations together with think-tanks like Business Council of Australia as well as the H.R. Nicholls Society in the 1980s. The ACTU argued that multi-skilling and refurbished awards were major factors that could contribute to the enhancement of the economic competitiveness. The arbitration system was dismantled as a result of demand for the so-called reforms by both the ACTU and employers (Woodward, 2010).

In 1986, employees’ trading off provision was the main determinant of wage increments. ‘Award restructuring’ started in 1986 and 1991 when many industrial relations focused on enterprise-based bargaining. Non-collective agreements then started taking effect in 1993. In 1996, anti-union legislations such as provisions for personal Australian Workplace Agreements were put to effect. In 2005, WorkChoices legislation was passed, and as a result, many union rights such as ready access to union-covered workplaces were revoked (Anderson, Gahan, Mitchell, & Stewart, 2011). Union density declined from 45.6% to 18.9% between 1986 and 2008 as absolute membership decreased from 2.7 million to 1.7 from 1990 to 2008.

Contrary to previous periods, the public sector recorded a significant fall of union density from 70.6% to 41.9 between 1986 and 2008. The decline was as a result of a huge downsizing in the 1990s and increase of part-time employees. Nevertheless, the influence of marginalization of the union was more in the private sector than in the public one. By 2008, just 13.6 % of workers in private sector were trade union members (Wilson & Spies‐Butcher, 2011).

A wide body of research concluded that unions had lower chances of losing their members if there were strong delegate structures in workplaces rather than overlying on arbitration. However, other researchers argued that union decline led to the absence of union delegates. However, it is evident that arbitration was the foundation of workplace unionism. Very few unions were ready for the end of arbitration, and this is clear since even the most organized ones experienced sharp membership falls.

By 2009, only 21% of workers in the manufacturing sector had a union ticket. Between 1996 and 2009, the union density of the coal industry (which had many unionized workers previously) dropped to 46% from 85%. By 2006, manufacturing jobs were only 10% of the total jobs in Australia. However, more workers continued joining the poorly unionized industries (Wilson & Spies‐Butcher, 2011). The retailing industry employed over one million workers; the highest number as compared to other industries, but only 15% of them was unionized. The number of part-time workers, especially casual employees, sharply increased since 1986, and by 2009, they accounted for 30% of the total workforce, 12 % higher than in 1986. Only 14.6% of these employees had a union ticket in 2009.

Mid-2009 marked a dawn to a new industrial relations regime, which increased enthusiasm among unionists and an increase in union membership was soon evident. Between 2008 and 2009, absolute union membership increased from 1,752,900 to 1,835,100 (Cooper, 2010). The public sector gained more members as compared to the non-public sector since its union density increased to 46.3% from 41.9%. As a result of this robust performance, the overall union density in Australia increased to 19.7 from 18.9. Nevertheless, the persistence of the favourable industrial relations environment was uncertain.

The Gillard federal government came back to power in 2010, and due to lack of a clear mandate, its survival is dependent on politicians and rural Independents (Ellem, 2013). Labour governments in New South Wales and Queens land stand at a risk of being evicted from office. Considering these political uncertainties, the union movement can only depend on itself for continued recovery.

The decline in the number of workers joining trade unions is persistent despite strong community support for such unions. In not more than 25 years ago, almost 50% of male Australian employees were members of trade unions, but to date, only 14.4% has a union card (Fenna, 2016).The Australian Bureau of Statistics indicates that the level of trade union membership and trade union density in Australia has significantly dropped since the 1980s. In fact, only one out of ten employees in the private sector is a member of a trade union. As reported by the Australian Bureau of Statistics, union membership decreased greatly between 2013 and 2014, leaving just 15% of all employees as members (Kelly, 2015).

Reasons for the Decline of Australian Unionism

Australian union density and membership decreases were caused by three main factors: change of structures in the labour market, union reaction to new strategies adopted by employers, and institutional factors. Change of structures in the labour market includes actualization, increased part-time work, high product market competition, the rise of industries and jobs with traditionally low union density, and increased self-employment, as well as alternative employment arrangements (Räthzel & Uzzell, 2011). The changes contributed to almost a half of the fall of union density from the 1980s to 1992.

However, the proportion has been lower since then. According to Holgate (2015), the rising competition in product and service market has a significant influence on deunionisation. The current competition, which is higher than in the 1970s, has been triggered by macroeconomic reforms, tariff reductions and microeconomic reforms, tariff cuts, and a recharged Australian Competition and Consumer Commission. A company experiencing monopoly finds it unproblematic to cater high salaries for its workers.

The ability to remunerate highly is because the prices in non-competitive markets are usually high and as a result, the firm reaps more profits than it would in a competitive market (Abbott, MacKinnon, & Fallon, 2017). In the absence of monopoly, markets become more competitive and prompt management to come up with cost-cutting strategies and adopt stronger anti-union tactics to minimize the wage bill.

Institutional factors refer to the changes in legislations that have had a negative influence on union membership. These changes comprise of the employment relationship de-collectivization and the pulling out of union recognition (Barnes & Markey, 2015). Between 1990 and 1995, five out of six state governments implemented legislation whose aim was to prohibit compulsory unionism (Mitchell, Gahan, Stewart, Cooney, & Marshall, 2010).

This move encouraged individual bargaining and made it easy for workplaces to move to non-award coverage. The impact of the legislation was almost similar to 1920s when existing Labour governments implemented laws supporting obligatory union membership and salary arbitration. In the late 1980s, over half of Australian employees were required to be union members to fulfil the conditions of employment (Markey, 2011).

However, in 1990, union membership ceased to be an employment requirement and many workers opted to withdraw from being members of trade unions (Cole & Limb, 2016). The unions that were most severely affected by the change of legislation were those that heavily relied on compulsory union laws. The influence of the legislation change on unions became worse when the Howard Government nearly stopped mandatory union membership countrywide soon after its election in 1996, making it hard for trade unions to enrol new members and hold protests.

The decline of union membership and union density in Australia is also as a result of new strategies by employers and the failure of unions to adjust according to the changes (Buchanan, Oliver, & Briggs, 2014). This factor has been overlooked for a long time as a potential cause until recently. Anti-union trends are evident in Australian employer behaviour, yet unions have not managed to counter this new attitude, leading them to make poor strategic choices (Cooper & Ellem, 2011). A precise example of poor union strategy is a scenario whereby unions have been focusing on ‘market share’ instead of concentrating on ‘expansionary’ unionism. This strategy has led to the waste of resources when unions are involved in costly coverage disputes.


As result of the decline of union density and union membership in Australia, the current product markets in the country have become more competitive than they were in the 1970s (Muir & Peetz, 2010). This increased competition is as a result of a series of changes such as highly rivalry in the markets, rising wage inequality, and legislations that have made it difficult for unions to organize (Bowden, 2011).

Besides, there has been a significant reduction of strikes since many employees do not belong to unions, which would otherwise facilitate them. Furthermore, any workplace needs that were previously met solely by unions are now being attended to by new organizations. Due to decreased union membership and union density, unions are shifting back to their nineteenth-century role of providing services such as insurance, legal advice, as well as adult learning. Development and success in the workplaces can be remarkable occurrences, but they cannot happen without regard for employees’ rights, salaries, wellbeing, and other favourable conditions (Fells, 2016).


After several recessions interrupting a brief recovery of unionism in the early 1970s, new problems overwhelmed industrial labour. Various efforts such as deregulation of industrial relations, an increase in unstable employment, and anti-union strategies by employers together with further economic changes were all focusing on reducing industrial labour to mere minority movement status. In this regard, only 20% of wage and salary earners are unionized. Although the decline of unionization has been in existence for decades, terming the condition as terminal should be done with hesitation. The death of industrial labour has been predicted very many times, but it seems to live longer than expected.


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